Finding Value in a Housing Rebound

Neil Hennessy's focused mid-cap fund is beating the market with companies tethered to home improvement and repair.

Benjamin Franklin once said, "If passion drives you, let reason hold the reins." While ole Ben was probably not specifically addressing mutual fund managers, Neil Hennessy of Hennessy Funds appears to have taken this nugget of advice to heart.

When it comes to investing, the companies making headlines and surging in price often don't stand a chance with Hennessy, who avoids hype and instead employs a purely quantitative approach. Companies are put through paces that include testing relative strength and focusing...